Guillaume Abel : “SRI is becoming THE relevant fund management”

Why did you decide last year to move to a 100% SRI approach by 2020?

Guillaume Abel : As a subsidiary of a financial player known for its civic commitment, LBPAM is the custodian of a civic responsibility that also commits it. SRI is becoming THE relevant fund management style for future investments as it is a concrete, effective and understandable response to global sustainable development challenges.

At the end of 2018, what percentage of your assets are invested through this approach? % in shares? % in Bonds? % Others ?

At the end of 2018, assets under management related this approach stand at € 115 billion (more than 50% of outstanding LBPAM assets - 54% to be exact) and are managed by systematically integrating extra-financial criteria into their process : 75% of bond assets, 34% of stocks assets, 13% of money market assets and 9% of private debt assets.

In concrete terms, how is possible to become a 100% SRI asset management company? Some funds will be closed? Do you approve this kind of economic risk? What happens if a large institutional investor wants a non-SRI dedicated mandate? Will you say no for this request?

From 2018, the deployment of the SRI Label charter for all funds has been launched. It will lead to a rationalization of our ranges and some fund mergers. With regard to dedicated mandates and funds, we interact with our clients to define, on a case-by-case basis, how portfolios are transformed into SRI. The major institutions readily adhere to the approach, supported by Article 173; they see in the SRI Label, a way to validate their investment approach.

Regarding ESG filter application for your funds, do you have a dedicated team? How many people work on extra financial ratings?

LBPAM has a team of 11 people dedicated to SRI research and the fund management of SRI thematic equity funds. In addition to setting up dedicated training courses, the team supports the management teams in this transition and trains them in the GREaT extra-financial analysis methodology (responsible corporate governance, sustainable resource management, energy and economic transition, development of the Territories).

Do you also intend to actively reduce the carbon footprint of your portfolios?

While carbon intensity is an important indicator, we believe that we also need to think in terms of financing solutions for the energy transition. It is in this sense that the LBPAM SRI Environmental Actions Fund (labeled TEEC and ISR) was created. LBPAM drives and communicates its carbon footprint each year in the LTE reporting.

Are you going to exclude some sectors ? For example, are you considering a definitive exit from coal, as did the Norwegian sovereign wealth fund ?

Tobacco and anti-personnel mines are the two sectors that are systematically excluded from our funds. Open-end SRI funds also exclude gambling and businesses in violation of Global Compact principles. We are currently working to exclude certain fossil resources, including coal to take into account the decarbonization strategy of companies.

What are the latest ESG / SRI topics that are of most interest to you? ESG ETFs? Green Bonds? Green real assets ?

Obviously, many topics are of interest to us, among those in progress:

• A green bond fund to come in 2019
• The creation of tailor-made SRI model portfolios to monitor the mandates of some clients
• The revision of the state assessment process, to offer a convincing approach on an asset class, not covered by the SRI Label